LONDON (Reuters) - Britain and South Korea have established a “fintech bridge” intended to make it easier for both countries to invest in the burgeoning financial technology sector, the British Treasury said on Friday.
The cooperation agreement, which follows similar deals with Australia and Singapore this year, will give British fintech companies and investors access to the Asian market and would attract Korean firms and investors to Britain, the Treasury said in a statement.
Britain has become the global capital for fintech, which is shaking up the traditional banking and financial services industry. More people work in the UK industry than in New York, or in Singapore, Hong Kong and Australia put together, a recent report by consultancy firm EY showed.
Last year the sector employed over 60,000 people in Britain and generated 6.6 billion pounds ($8.7 billion) in revenue, according to the Treasury statement.
“The newly established fintech bridge between the UK and the Republic of Korea is an important step for one of this country’s most exciting industries,” said Philip Hammond, Britain’s new finance minister.
“The government is determined to help the UK fintech sector to innovate and grow and to ensure that Britain remains the location of choice for fintech start-ups.”
Britain’s vote to leave the European Union last month has caused some worries that start-ups will relocate. Financial firms rely on the EU’s “passporting” system, which allows them to sell their services across the bloc while being registered and regulated just in Britain, thus saving huge amounts of money by not having to set up shop in each member state.
Ten London-based fintech start-ups have already made enquiries about moving to Berlin since the vote for Brexit, business development group Berlin Partner said on Monday.
The cooperation agreement has regulatory approval from Britain’s Financial Conduct Authority (FCA) and the Korean Financial Services Commission (FSC), and will enable the regulators to share information about financial innovation in their respective markets.
“Although Korea is a relative newcomer to fintech, we have been focusing on developing a regulatory environment that supports rapid growth,” said FSC Chairman Yim Jong-yong. “The fintech bridge ... is another step in strengthening the strong financial relationship between Korea and the UK.”
($1 = 0.7630 British Pounds)
Reporting by Jemima Kelly; editing by Giles Elgood